MONTREAL, Jan. 20, 2014 /CNW Telbec/ - The Mayor of Montréal, Denis
Coderre, and the Chairman of the Executive Committee, Pierre
Desrochers, today announced that, following the city's action, the Société de vélo en libre-service submitted a notice of intention to seek protection under the Bankruptcy
and Insolvency Act.
This legislation will offer protection to the enterprise, so that it may
restructure its business and finances. The Société de vélo en libre-service will therefore remain in operation during this period as well as
maintain services to its members.
"When our administration took over at City Hall, we were given a grim
financial portrait of the Société de vélo en libre-service. The city has supported the Société financially for several years, particularly through a loan of $37
million and an $11 million loan guarantee, of which $6.4 million are
engaged. Because the Société de vélo en libre-service cannot meet its financial obligations nor find a viable short-term
solution, and because of the uncertainty regarding the possible
recovery of the sums injected by the city, we have decided to act now
rather than later. It is not up to the taxpayers to assume the
financial risk involving a business plan. Our duty is to protect the
interests of Montrealers, and this is what we are doing today," said
The Société de vélo en libre-service must seek protection under the Bankruptcy and Insolvency Act, because
certain clients withheld large payments totalling $5.6 million. This
has affected cash flow and led to insolvency. These actions were caused
by delays in the development of its systems solution. No job losses are
expected at this time.
"This decision has been carefully considered. We represent the
taxpayers, and injecting additional funds to maintain the Société de vélo en libre-service was out of the question. If BIXI can be saved, it is through the
Bankruptcy and Insolvency Act. Waiting any longer would only increase
the financial risk for the city, which would be unacceptable," added
Everything will be done, so that the 2014 BIXI Montréal season will not
be affected. Over the next few days, the Société de vélo en libre-service will meet with city representatives to plan BIXI's upcoming season and
examine the best scenarios to maintain city investments in the Société. Those who have purchased their BIXI membership at the end of 2013 for
the 2014 season will be able to use the service as soon as the season
"We will do everything possible to maintain the BIXI service for
Montrealers and visitors, while protecting the interests of taxpayers.
Although Montréal has served as an incubator for BIXI's development,
the city's mission is not to replace private enterprise. For this
reason, every effort will be made to sell BIXI's international
activities," said Mr. Desrochers.
SOURCE: Ville de Montréal - Cabinet du maire et du comité exécutif
For further information:
Louis-Pascal Cyr, Director of Communications
Office of the Mayor and Executive Committee